Federal Bailout Aids Colleges, Only Some Students

Federal Bailout Aids Colleges, Only Some Students
portrait of Anne Dennon
By Anne Dennon

Published on May 28, 2020

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In recent decades, higher education has struggled to create equal opportunities for underserved student populations. And with the COVID-19 pandemic testing the limits of colleges and universities, these students may be left behind altogether.

As part of the $2.2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act, the Higher Education Emergency Relief Fund (HEERF) allocates $14.2 billion to aid struggling colleges and college students. Schools are required to give at least 50% of the funds directly to students as emergency grants.

Over $14 billion of the CARES Act goes to higher education. At least half must go directly to students who are eligible for federal financial aid and have been impacted financially by campus closures.

The amount of aid each institution gets depends on student enrollment numbers, and schools must apply to receive their share. As of late April, just half of eligible colleges had started the application process to receive the federal funds, though their needs eclipse the current bailout amount.

Having been largely excluded from earlier federal relief packages, college students must now wait for schools to get and distribute coronavirus relief funds.

Although the U.S. Department of Education (ED) insists that at least half the funds be given directly to students in need, eligibility requirements exclude some vulnerable student populations, including "Dreamers" (undocumented students) and international students.

No Federal Relief for Undocumented and International Students

College students must meet Title IV eligibility requirements in order to receive HEERF grants. Title IV of the Higher Education Act maintains a long list of requirements: you must be a U.S. citizen or eligible noncitizen, possess a Social Security number, and earn passing grades.

Eligibility also hinges on accruing expenses as a result of campus closures, such as a loss of housing, meal plans, and/or childcare. Consequently, online students are ineligible to receive coronavirus relief funds.

Although students enrolled in online programs often choose remote education believing it poses fewer challenges and expenses than an on-campus education does, their needs — whether in terms of lost income, childcare, or accessibility — are no less important than those of traditional college students.

Student Requirements for Emergency Financial Aid

Be enrolled or accepted for enrollment in a degree or certificate program Not be enrolled in elementary or secondary school For currently enrolled students, be making satisfactory academic progress Not owe an overpayment on Title IV grants or loans Not be in default on a Title IV loan File "as part of the original financial aid application process" a certification that includes a statement of educational purpose and the student's SSN Be a U.S. citizen or national, permanent resident, or other eligible noncitizen Have returned fraudulently obtained Title IV funds if convicted of or pled guilty or no contest to charges Not have fraudulently received Title IV loans in excess of annual or aggregate limits Have repaid Title IV loan amounts in excess of annual or aggregate limits if obtained inadvertently Have Selective Service registration verified Have Social Security Number verified Not have a federal or state conviction for drug possession or sale, with certain time limitations

Source: NASFAA

The same requirements for federal student aid apply to the emergency grants. Upholding these Title IV requirements means undocumented and Deferred Action for Childhood Arrival (DACA) students will not receive funds. According to the ED, current law doesn't offer the option.

The California Community College system is suing the ED over these eligibility requirements, calling them arbitrary and harmful. Some schools, including the University of California and California State University systems, have pledged to use their own money to assist noncitizen and undocumented students.

Other organizations are also stepping in to aid students excluded by ED guidance. The COVID-19 Student Emergency Aid Initiative and the Institute of International Education's Emergency Student Fund are offering grants to help close the financial aid gap.

Students May Need to Apply to Receive Aid

Colleges decide how they distribute emergency grants to students. Some schools have already started sending money to students, whereas others are still waiting to receive funds or busy deciding how to determine students' eligibility, need, and award amounts.

The amount awarded per student varies within and among schools but is generally in the hundreds of dollars.

Institutions essentially have two options: proactively identify eligible students based on student records, or ask students to apply for the funds directly. Some schools are taking a hybrid approach by simultaneously sending funds to students in need and responding to requests for aid.

How much to award an individual student is up to the school. Institutions can offer a set amount to each eligible student or use a formula based on factors like enrolled credits and family income. The amount awarded per student varies within and among schools but is generally in the hundreds of dollars. Several colleges claim that the average grant amount will be $1,000.

Some colleges are prioritizing students who have completed the 2019-20 Free Application for Federal Student Aid (FAFSA). Schools already rely on this form for students' financial information. Completing the FAFSA may be the best way for students to demonstrate need.

Higher Education Hopes for More Money

Some wealthy colleges, such as Harvard, Princeton, and Stanford, announced they would not apply for their share of the distribution after bipartisan criticism — including from President Trump — that the bailout didn't consider schools' financial needs.

Many institutions — particularly small, regional, less selective schools — are hurting. According to some stakeholders, the $14 billion coronavirus rescue package falls far short of the projected losses for higher education. The American Council on Education requested $50 billion in emergency relief for students and institutions.

[F]or many underserved student populations, bills and basic needs won't wait.

Amid calls to refund students for winter and spring terms, colleges face low enrollment projections. Higher education institutions are relying more on student tuition income as state funding shrinks. Now, schools are turning to the government for support. Some colleges have reported increased expenses due to moving classes and services online.

Colleges hope for another relief measure, and one could be on the horizon. House Democrats unveiled a $3 trillion plan for further coronavirus relief, but any more distributions are likely to be delayed. As Republicans prepare a counterplan, the White House waits to see the effects of the current bailout.

Indeed, "wait and see" is the approach many colleges and students are taking at this time, as schools debate reopening and students reconsider their education options.

But for many underserved student populations, bills and basic needs won't wait. When colleges can't equally distribute the resources necessary to succeed, higher education effectively breaks its promise of social mobility.

Similar to the FAFSA, the CSS Profile is a financial aid application required by certain colleges for the purpose of awarding nonfederal aid. Learn about the top online bachelor's in accounting programs of 2021 while also familiarizing yourself with common courses, career options, and helpful info. Whether you're looking for an online, in-person, or hybrid coding bootcamp, we've compiled a comprehensive list of the best bootcamps around.